According to a new study published by UN Environment, the Frankfurt School-UNEP Collaborating Centre and Bloomberg New Energy Finance, the installation of renewable power capacity hit a record high last year, adding 138.5 gigawatts to the global power capacity, the approximate equivalent of 16 of the world's largest existing power producing facilities combined. Not only that, but this increase came at a lower investment cost due to falling technology prices. Given this scenario and with more cities pledging to go 100 percent renewable, is green energy ready to be considered a serious mainstream contender to fossil fuels?

Making a case for renewable energy

Solar and wind power were the main drivers of this surge in new electricity generating capacity, due to the falling costs of solar photovoltaics and wind, followed by other renewables such as biomass and waste-to-energy, geothermal, small hydro and marine sources. In particular, 2016 was a boom year for solar power, with solar capacity additions reaching a high of 75 gigawatts, the first time there was "significantly more" of this energy source added than any other generating technology.

In the US, solar energy grew by 38 percent (0.15 quads), buoyed by a decrease in the price of photovoltaic panels over the past decade. Use of wind power, on the other hand, grew by 19 percent (0.33 quads).

"Generous incentives for renewable energy, combined with improved 'know-how' in siting and building wind farms, has led to a favorable environment for growth in this sector," says A.J. Simon, group leader for the Lawrence Livermore National Laboratory.

For green energy advocates, the environmental factor is one more reason to endorse it: last year's renewables generation prevented the emission of some 1.7 gigatonnes of carbon dioxide (equivalent to the emissions from 211,233,570 passenger vehicles in one year). Had these installations not been built, the world's greenhouse gas problems would be "significantly worse," say the authors.

Looking beyond the numbers

While these figures might support a global shift to renewable energy, challenges still exist for implementing it on a large scale. For a start, even though its growth figures have been increasing for the past five years, renewable energy, excluding large hydro, accounted for just a small fraction – 11.3 percent, to be precise – of the total global electricity generation last year.

One of the on-going challenges of implementing renewable energy on a massive scale is that there is still no vast storage technology capable of storing solar and wind energy, and turning it into a reliable source of power. This means that fossil fuel plants will continue to be a part of the energy landscape to fill in for the times when the sun and wind aren't producing any energy. In addition, they will have to be kept running even when they're not needed, since operators can't simply shut them down and restart them when the need arises.

Secondly, the current power grid system was designed with fossil fuels in mind and thus lacks the flexibility to take into account the fluctuations in weather. Even though there might be more solar and wind energy farms being built, this does not guarantee that everyone will be able to benefit from the power generated without proper transmission lines to distribute it evenly. The consequences of not having such an infrastructure in place can be seen in the case of Chile, whose solar farms produced so much power last year that it had to be given away for free as there was no way to distribute it to regions outside their grid.

In Europe, market imbalances (i.e. a surge of solar power during a period of low demand) and the lack of a flexible power grid system have resulted in wholesale electricity prices going into negative figures for brief periods, a situation that is popping up in other cities as solar power grows, as was the case in California recently.

While this might sound like good news, negative power prices don't translate into cost savings for end users, since retail rates are based on averages. In fact, despite its electricity glut, California has the seventh-highest electricity rate in the country, with residents paying 18.44 cents per kilowatt hour. For companies that own power plants, these surpluses and low prices often end up hurting their bottom line, which in turn discourages investment. Indeed, as the report notes, countries such as Mexico, Chile, Uruguay, South Africa and Morocco all saw investment falling by more than 60 percent, owing to a slowdown in electricity demand and financing issues.

"[The] structure of electricity markets continues to be a challenge not just for renewable energy developers but also for energy ministries around the world," write the authors. "There is the issue of how to reward flexible generation and storage, so that the system is always able to respond when wind and solar generation drops."

According to the report, investors pledged a record US$41.6 billion to finance technologies such as smart meters and energy storage to help address these challenges. Apart from these solutions, hybrid projects, which combine two different kinds of renewable energy technologies, are also gaining momentum as a potential solution to the problem of intermittency. The idea is that situating two or more of them together not only increases the electricity output from each hectare of land while sharing one grid connection, but also reduces overall intermittency and operating costs. According to estimates, there are around 20 renewable energy hybrid projects that have been completed or are in the process of being developed.

If scientists can figure out a way to make it a reliable source of energy, every year could be a boom year for solar power(Credit: National Renewable Energy Laboratory)

In particular, 2016 was a boom year for solar power, with solar capacity additions reaching a high of 75 gigawatts(Credit: <a href="http://depositphotos.com/12738853/stock-photo-solar-panels-with-sun.html" rel="nofollow">Spanychev/Depositphotos</a>)